FX.co ★ Pound Weakens Ahead of BoE Decision

The British pound fell to $1.34, marking its lowest point in a month, as investors turned their attention to the Bank of England's upcoming policy decision and continued to monitor increasing tensions in the Middle East. The prevailing expectation among market participants is for the BoE to maintain interest rates unchanged on Thursday, set against a backdrop of heightened geopolitical risks, sluggish economic performance, persistent inflation, and the looming threat of trade disruptions from proposed US tariffs. With the rate decision largely anticipated, the spotlight will be on the voting distribution, especially following last month's unexpected three-way split among policymakers. Concurrently, the US dollar strengthened after the Federal Reserve decided to keep rates steady. Fed Chair Jerome Powell indicated potential inflationary pressures on the horizon, in part due to the new tariffs proposed by the Trump administration.